What Happens To Your CPF Savings When You Pass On?

You (or your parents) may have received WhatsApp messages about what would happen to your CPF monies (including your MediSave) when you pass on. Depending on which version of these messages you receive, some of these (fake) claims include your CPF monies going to the MediSave accounts of your Next-Of-Kin (NOK), or that your unused MediSave savings goes to the government.

Source: Various Sources Online

The first thing to take note is that the message above, and other variations of it, are fake and baseless. As clarified by gov.sg, the default nomination that your NOK/nominees will receive will be in cash.

What Are The Different Types Of CPF Nomination?

It’s not entirely accurate to say that your CPF savings cannot be passed down from one CPF account to another (i.e. from your CPF account to your nominees CPF’s account). This is possible, but only if you, the CPF member, deliberately choose this option as your preferred way for how your nominees should receive your remaining CPF savings.

As stated in the CPF website, there are three options that you can choose for how your CPF nominees should receive your balanced CPF funds. They are:

(1) Cash Nomination: This the default nomination type.

(2) Enhanced Nomination Scheme (ENS) Nomination: Your nominee(s) will receive the CPF savings due to them in their CPF accounts.

(3) Special Needs Savings Scheme (SNSS) Nomination: This scheme is applicable for parents with special-need children. It allows parents to nominate their children with special needs to receive their CPF savings due to them on a monthly basis. If you are considering this option for your special-need child, you can find out more from the Special Needs Trust Co.

Besides the possibility that such messages were deliberately created to cause confusion and fear-mongering among Singaporeans, it’s possible that such claims originated due to incomplete understanding of how the CPF Nomination Scheme works.

How Does The CPF Nomination Scheme Work?

CPF Nomination covers your CPF savings in your Ordinary, Special, MediSave and Retirement Account. It also covers any unused CPF LIFE premiums which were used to pay for your CPF LIFE, as well as any discounted SingTel shares that you may have. These are assets which are excluded from your will, if you have one.

As explained by the CPF Board, making a CPF nomination is neither a requirement nor even necessary. This is because similar to how your assets are distributed if you pass on without leaving a valid will, the entire savings in your CPF accounts will be distributed by the Public Trustee to your family members according to the intestacy law or the Certificate of Inheritance (for Muslims).

However, you may want to make a CPF nomination for the following circumstances.

Reason 1: You have a separate will prepared

If you would like for your CPF savings to be distributed in a similar way to how your will distributes other financial assets that you have, you need to make sure that your CPF nomination is done in a way which is in accordance to your wishes, rather than for it to be distributed based on the intestacy law.

Reason 2: You are a divorcee

When you marry your spouse, your spouse will automatically be included as a nominee. This of course is in accordance to the intestate succession act.

Here is the thing to take note of. In the event of a divorce, your earlier nomination, which refers to your now ex-spouse, does not automatically get revoked. What this means is that unless you submit an additional nomination to revoke the earlier nominee, your ex-spouse will be entitled to your CPF savings in the event of your demise.

If you do remarry, then the earlier nomination made to the ex-spouse will automatically be revoked by the new marriage, with your new spouse included as the nominee.

Making A Cash Nomination

Since making a separate CPF nomination is something that some Singaporeans may want to do, as per the reasons mentioned above, the CPF website provides the information that you need to know, as well the forms and instructions on how this can be done.

The irony of this is that the presence of the form may lead some people to think that a cash nomination is necessary, in order to ensure that their loved ones receive their remaining CPF savings in cash after they have pass on.

This isn’t true. Since all CPF savings are already disbursed in the form of cash to a member’s nominees by default (unless you specify otherwise), your loved ones are already receiving your remaining CPF savings in cash, even if you have not made any CPF cash nomination.

The CPF cash nomination form is meant for those who wish to make a separate nomination which deviates from the default nomination that has been made. For these individuals, they will need to fill in and submit a separate and valid CPF cash nomination form.

Of course, making an Enhanced Nomination Scheme (ENS) Nomination so that your nominees receive your CPF savings in their CPF accounts is also possible, but this is only done if you purposely choose that as your preferred distribution manner.